The rise and fall of Northwest Airlines

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A few months before aviator Charles Lindbergh made his record-breaking transatlantic flight, Northwest Airways, Inc. began carrying airmail between the Twin Cities and Chicago. As Northwest Airlines, Inc., the company became a major international carrier before financial troubles forced its merger with Delta Air Lines, Inc. in 2008.

Minnesota entrepreneur Colonel Lewis Hotchkiss Brittin incorporated Northwest Airways, Inc. in Michigan on September 1, 1926. He based his operations south of Minneapolis at Speedway Field with nine employees. The company’s airmail contract required that delivery start on October 1. Brittin rented two open-cockpit biplanes to make the twice-daily, eight-hundred-mile round-trip flight to Chicago. By November, the company owned three Stinson Detroiter closed-cabin planes.

Northwest Airways began passenger service to Chicago on July 5, 1927. Stunt pilot Charles “Speed” Holman carried two passengers on the inaugural flight. Engine failure forced an emergency landing near Hastings, Minnesota, but a second attempt made it safely to Chicago at 2:30 a.m. on July 6. The airline carried 106 passengers in the first year, charging thirty dollars one way and fifty dollars round trip. The airline made its first international flight to Winnipeg in 1928 but discontinued the route after three months due to objections from the Canadian government.

Minnesota investors purchased Northwest Airways in 1929. Its operations moved to St. Paul’s downtown airfield the next year, and routes expanded to the Dakotas, Montana, and Washington State. The company incorporated under Minnesota law on April 16, 1934 as Northwest Airlines, Inc. and introduced service to the east coast.

During World War II, the company operated a bomber modification center at St. Paul’s Holman Field and flew military cargo missions to Canada, Alaska, and the Aleutian Islands. In 1947, Northwest flew the Great Circle Route over the Pacific Ocean to Japan, China, Korea, and the Philippines. It adopted the name “Northwest Orient” for advertising purposes. The airline’s Asian connections proved useful in 1950 when the U.S. government chose the airline for the Korean Air Lift mission.

Northwest Airlines moved operations into new headquarters at Wold-Chamberlain Field (formerly Speedway, later Minneapolis-St. Paul International Airport) in 1961. It introduced flights to California. In the 1970s, passengers could fly nonstop from Chicago to Hawaii and take advantage of computerized ticketing for flights to Asia.

Courtesy of the Minnesota Historical Society

Northwest Orient Airlines menu, c.1970.

The Airline Deregulation Act of 1978 ended government control of airlines. Northwest continued to thrive in the more competitive market. In the following year, it added more than twenty domestic markets and began transatlantic service to Sweden and Denmark.

NWA, Inc., a Delaware corporation, became the holding company for Northwest Airlines in 1984. The company’s investments eventually included Mainline Travel, Inc. of Minnetonka, a Northwest Airlink agreement with Mesaba Airlines, and Republic Airlines. In June 1989, Wings Holdings (later Northwest Airlines Corporation) acquired NWA Inc. at a cost of approximately $3.5 billion.

Struggling with debt from the buyout, Northwest sought financial aid from the Minnesota legislature in 1991. Even with the help of $761 million in public funds, the airline teetered on the brink of bankruptcy in 1993. Relief came when pilots and other employees agreed to $980 million in wage and benefits concessions.

The airline’s profits rose dramatically in the mid-1990s. It added flights to six Canadian cities, improved its “WorldPerks” frequent flier program, and expanded electronic ticketing service. Its fleet grew to more than four hundred planes. A partnership with KLM, a Dutch airline, provided financial stability by increasing the joint airlines’ global market share.

Northwest experienced the first of several setbacks in 1998 when a pilots’ strike halted service for nearly three weeks. The September 11, 2001 terrorist attacks caused the company to reduce its flight schedule by an estimated twenty percent, lay off ten thousand workers, and heighten security. Northwest reduced its fares and offered special business perks to attract customers. In 2003 the company cut flights again due to unrest in Iraq. In 2005 Hurricane Katrina destroyed oil rigs in the Gulf of Mexico, causing the price of fuel to rise. Northwest responded by cutting wages and selling off aircraft.

These measures failed to save the faltering airline. In 2005, Northwest filed for bankruptcy. It emerged from reorganization in 2007. Executives announced a merger with Delta Air Lines, Inc. the following year. Northwest officially became Delta on January 1, 2010.

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Comments (3)

One of several issues that prompted NWA mergers was the 1981 intrusion of Republic, taking significant share in the NWA “owned” northwest corridor from MSP to Seattle.

Republic offered better (friendlier) service in promoting $100 one-way tickets (as opposed to NWA $300+ at the time), and promotional gifts to boot. I still have my golf bag cart and a few other items from those days.

As a UW grad student then making quarterly trips between Seatac and MSP, the Republic option was a most timely and pleasant arrival. As Republic extended new routes, NWA had no choice but to buy them out.

This flyer will never forget the night NWA finally attempted the full merger of flight communication systems some years later. I was stranded with many others in Memphis, having been re-routed on way to Houston from here.

Desk attendants had absolutely no working communications except some in-terminal phone lines. Nobody knew anything about when, where, why or anything else. Passengers were becoming threatening (truly, I had to settle one guy down by reminding him how he looked in front of his young son).

It was the most mess one might imagine, as if some enemy had come upon us, melting all com links. Not only did ground personnel not know where their flights were enroute; but aircraft aloft had only on-board systems working, with absolutely no operating ground control channels. They fortunately retained air-to-air com channels so they at least knew the proximity of other aircraft. Without that one link, events might have become catastrophic.

Our desk/gate crew were completely in the dark, with a supervisor running back and forth between her contacts and the gate reps. After watching too many angry men berate our battered gate attendant, I put myself between the company reps and the passengers, effectively as calm spokesman of factual reality, group psychologist and general information presenter. People simply need to know the facts, reality of circumstance and honest expectations of outcome. The threatening and shouting quickly subsided to typical grumbling.
The noted father remained in his seat with his family, his wife sharing a look of relief.

The airline(s) clearly had no functional elements in place for that conversion.
We had chaos in the skies as well as on the ground…all because NWA (the controlling operator) completely messed up this change-over.
Little was ever written about details, other than typical network remarks about the obvious.

Later, I learned NWA officials had two choices in “planning”: to phase in the systems convergence, or to do it all at once, hoping for the best and working the fallout later. In other words, they had no insightful planning at all, simply default execution without fallout remediation.

Mangement again changed personnel, and NWA eventually lost its brand.
My opinion was that NWA had become too big to perform, and needed to lose its well-tarnished brand. Some locals bemoaned the loss of trademark. Others of us are relieved to no longer have “Northworst” in our minds.

One hopes this series of mergers and errors has become a major MBA case study.

1) Every major “legacy” carrier reorganized through a bankruptcy filing. This is not a reflection on the management of any particular airline, but was an outcome of the years of dynamic evolution the industry experienced in the post regulatory environment.
2) Northwest was not “faltering” when they merged with Delta. In an SEC filing, they reported operating income in excess of $1-billion in calendar year 2007. (reported net income was actually higher, due to a change in accounting method). The Delta merger was for strategic reasons in an industry that was consolidating.

I believe it is worth noting too, that Northwest’s well-established transpacific route system- including 5th freedom rights through Japan- made it an extremely attractive merger target- but also could have sustained Northwest as an independent. The addition of NWA to Delta’s network makes for a powerful combination, in every respect.

With service in steady decline since the Republic Merger, the huge buildup in Boston beginning in 1989 as DC10 Europe Base eventually with Nonstops to CDG, LGA, AMS, GLA, FRA then seasonally Rome was a huge Miistake. All this service was inaugurated and discontinued except for London By 1995. Daily Nonstops to LAX, SFO and SEA were successful at first..continuing the return Europe flights to the west coast….it became clearer that it would be much cheaper to fly into Detroit rather Boston which was a terminating airport, not a hub. The head on compitition of hourly shuttle flights to Washington National directly butting heads with Delta and US AIR with a very expensive silver service snack featuring Peking Duck and Pot Stickers for F and Y Class. As the caterer, I knew time was running out on Northwest. Marriott sold the Inflight to former Northwest and Marriott Board Members. The first goal was to run CaterAir into the ground..which it did in 1995 selling it eventually to sky chef. Legacy carriers were discontinuing meal service on domestic flights and the grab was on for Dead Carriers such as Eastern, TWA, Pan Am and other for routes. Then Northwest began 3 of its work stoppages from the 90s to the merger. The theft of mail and credit cards…a multi million dollar operation in Boston and MSP that lead to the torture and murder of a Boston baggage supervisor that was set up from the break room under gate 3 when a phone call was made that she was leaving to pick up sandwiches for the nite crew off property. No one was caught or charged for her murder but plenty were for the credit card theft.

It was the unions that killed NWA. Old equipment. Too much debt. But it was squarely the unions. The same ones that killed Eastern. They just couldn’t see the writing on the wall. More fuel efficient aircraft are almost immune to fuel price increases. Newer aircraft and Engines so advanced that P&W, GE and Rolls Royce could never imagine in theory these engines may never have to be removed in the aircrafts lifetime unless damaged, just needing scheduled maintenance Not good news for all those DC10, DC9 mechanics. Unions killed Northwest and the Employees who moved over to Delta tried to Unionized mostly non Union Delta. A few times. Wanting to recreate the failure. They were not successful. Spirit…Jet Blue…Southwest all made it during the same time.They had their problems….but pulled though.

I loved Northwest. My 250,000 World Perks Miles proved it.But starting around 1994, NWA didn’t love me back. Rude CSRs, Flight Attendants and Supervisors who tried to make the customer feel privlaged to be with NWA. I left the airline industry in 1996 until I began my one man, one plane water taxi service in The Bahamas.